UCC Filing Issues with Auto Retail Installment Contract and Security Agreement - Need Help

We're in Michigan. The contracts are generated by our DMS system and I thought it was pulling the name consistently but maybe there's a formatting issue between the two sections of the document.

Michigan is really strict about debtor names. I had similar issues last year where the retail portion had 'John A Smith' but the security agreement section had 'John Andrew Smith' and they rejected everything.

That sounds helpful. How accurate is it with catching the subtle differences between retail contracts and security agreements?

Very accurate. It specifically looks for name variations between different sections of the same document. Saved me from probably 20+ rejections this quarter alone.

Never heard of that service but anything that prevents filing rejections sounds worth trying. These re-filing fees add up quick.

Good point. A few of these do have co-signers. I need to double check if I'm pulling the right debtor name from the security agreement section versus the retail contract section.

Co-signers are tricky. If they're on the security agreement as additional debtors you might need separate UCC-1s or list them all. Check your state's requirements.

Wait, that's not right. Co-signers on retail contracts don't automatically become debtors on the security agreement unless specifically named. The security agreement controls for UCC purposes.

They're usually combined into one document but with distinct sections. The UCC-1 filing is based on the security agreement portion, not the retail installment contract portion.

Right, the retail installment contract is the payment terms and the security agreement is what gives you the lien rights. UCC filing is all about the security agreement side.

That makes sense. So if there's a name discrepancy between the two sections, you go with the security agreement version for the UCC-1?

Exactly. The security agreement governs the UCC filing requirements.

The combined forms are fine if they're drafted properly. The problem is when the DMS systems don't populate both sections consistently.

True. It's usually a software issue rather than a legal issue. The systems treat them as separate fields instead of ensuring consistency.

That's probably what's happening to us. I bet the retail installment contract pulls from one database field and the security agreement pulls from another. I'll check with our system vendor.

Yeah check your field mapping. Credit apps often have nicknames or preferred names while title apps have legal names. Security agreement should use the legal name for UCC purposes.

Exactly. Make sure both sections are pulling from the same source field, preferably the legal name from the title application or credit report.

How does that work exactly? Does it read the PDF and compare the different sections automatically?

Yes, it reads the document and highlights where the debtor information differs between the retail contract portion and security agreement portion. Very helpful for these combo documents.

I'm definitely going to try that. Anything to avoid more rejections and re-filing fees.

Good catch. I was so focused on the debtor names I didn't think about VIN consistency between the sections.

VIN issues are super common with these combo documents. The retail side might abbreviate or format differently than the security agreement side.

Always use the full 17-character VIN from the security agreement section for your UCC-1 collateral description. Don't use any shortened versions from the retail contract part.

RV financing has the same issues. The combo documents create the same potential for inconsistencies between retail and security agreement sections.

RV deals are actually worse because the amounts are higher so the lien position is more critical. Can't afford to have UCC filings rejected and lose priority.

Exactly. That's why I'm looking into that verification tool someone mentioned. Better to catch the problems upfront.

That's the third recommendation for that service in this thread. I'm convinced I need to try it. These rejections are killing our workflow.

Same here. Between the re-filing fees and the time spent fixing these issues, it pays for itself quickly.

I was skeptical at first but the accuracy is impressive. It catches subtle differences that I would have missed reviewing manually.